Elon Musk has said it before but will repeat it whenever asked. While virtually attending the B20 conference in Indonesia, Musk was asked about creating a smaller, more affordable car. The moderator suggested it be called the Model I for India or Indonesia. It’s a reoccurring question, but with competition also targeting a cheaper price point, Tesla must find a way to get there.
Musk responded to the question familiarly, “I can’t speak too much to the future of Tesla product development, except to say that we do think that making a much more affordable vehicle would make a lot of sense and we should do something.”
It’s something Tesla will have to do. Volvo’s CEO Jim Rowan told Automotive New Europe that EVs should be at price parity with gas cars in a couple of years.
The manufacturer has also teased a small EV that it sees as entry-level for consumers. It’s set a goal of producing 600,000 battery-powered vehicles by 2025. So far this year, it has made 40,500. Therefore, the new small vehicle the company is talking about would have to be a price point that would move many cars. Rowan said, “city car aimed at a younger demographic who can subscribe to it and make it their first Volvo.”
Elon Musk at the B20 Conference
Tesla has already brought down the price of producing electric vehicles, but Volvo says it can do better. Volvo said during its Capital Markets Day presentations that it plans to have battery pack costs down to less than $100 per kilowatt hour by 2025-26. A recent tear-down of the Tesla Model 3 pack, overseen by analysts from UBS bank, showed a cost of $131 per kWh.
During the third quarter earnings call, Musk said that Tesla’s new vehicle development team was already working on the next platform and would incorporate everything the company has learned from Models S, 3, X, Y, Semi and Cybertruck.
He also said that the target was to create a 2-for-1, as in producing two cars using the same effort it currently takes to build one. “It will be smaller, to be clear. But it will, I think, certainly become, certainly exceed the production of all our other vehicles combined.”
There have been rumblings of a Model 2, a vehicle that would cost around $25,000, for a few years around Tesla.
With the company having a hard time keeping up with orders for the Model 3 and Model Y, that didn’t seem necessary. However, Musk could also be alluding to the company's upcoming Robotaxi, or possibly a platform will be shared by both vehicles.
The company must address the need for a cheaper vehicle with the competition catching up and targeting areas where Tesla doesn’t currently offer products.
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In just 8 months, Tesla has gone from breaking ground to delivering electrons at its most ambitious Supercharger project to date, just in time to be ready for the busy Fourth of July holiday weekend. Project Oasis, the world’s largest Supercharger site, is now partially open to customers for its first phase in Lost Hills, California.
What makes this remarkable is the speed of execution. In just eight months, Tesla has constructed a site that will eventually feature 168 stalls (84 stalls are now open), supported by 11 MW of solar power and 10 Megapacks of battery storage. That construction speed is pretty impressive, but what is even more impressive is how this new station operates and what it means for future Supercharging infrastructure.
Self-Sufficient Energy Oasis
Not a Tesla App
The first 84 stalls at Lost Hills are now open, and according to the Tesla Charging team, they are currently powered solely by the sun and operate off-grid.
This makes it more than just a new Supercharger site. It serves as a proof of concept for a new type of Supercharger. Unlike nearly every other charging site in the world, which draws power from local utilities, this station generates its own clean electricity from its massive solar array and stores it in its array of on-site Megapacks.
Self-sufficient charging stations are something completely different than what we see today. They are highly resilient since they’re not reliant on the grid. That means that even if there is a local power outage, brownout, or blackout, one can always come to Lost Hills to Supercharge.
If you’ve got a Cybertruck, you could take advantage of the Cybertruck’s Powershare feature and charge up at Lost Hills to help keep your home powered during a blackout, utilizing the Cybertruck as a portable battery charger. Now that’s true independence and self-reliance.
The Future of Charging
Solar-powered Superchargers help avoid massive new loads on already stressed electrical grids, especially during peak afternoon and evening hours, when demand is the highest.
This is Tesla’s vision for the future of charging: a clean, fully closed-loop ecosystem that sustains itself. The sun’s energy is captured, stored, and delivered directly to vehicles on site at any time of day without relying on the electrical grid or fossil fuels.
Largest Supercharger in the World
This opening of 84 stalls is just the first phase of the project. Tesla says that the remaining stalls, as well as a new on-site lounge, are coming later this year. Once complete, the 168-stall site will be the largest Supercharger site in the world.
While the speed of building such a massive project in just eight months is a testament to Tesla’s execution, the true innovation is actually that self-sustainability. Let’s hope we see even more large, self-sufficient Supercharger sites across the world in the near future.
Elon Musk is once again seeking to expand Tesla’s vertical integration in the energy sector, this time focusing squarely on solar power. Following discussions on X that highlighted the massive gap in solar deployments between the US and China, Elon is now discussing the need for a Tesla Solar Gigafactory in the United States.
This potential move is driven by a specific catalyst: the exponential growth of AI is creating an insatiable demand for electricity. For Tesla and xAI, two of Elon’s companies betting their future on AI, building the power generation required is a strategic necessity.
A new factory wouldn’t just be about making panels; it would be about manufacturing the final missing piece in Tesla’s vertically integrated energy ecosystem.
Maybe there should be a solar Gigafactory in America
The context for this renewed focus is pretty stark. In May, China reportedly added a staggering 93 gigawatts (GW) of solar power capacity. In contrast, the United States installed approximately 14 GW over the entire first quarter, roughly 20 times less than China.
The primary driver of this demand is the revolution in AI. Training ever-larger and smarter AI models involves operating vast data centers, which consume staggering amounts of power. Google, Amazon, and Microsoft have turned to small-scale nuclear reactors, with Microsoft petitioning to reopen the infamous Three Mile Island for its AI operations.
For Elon’s companies, whose future products like FSD, Optimus, and Grok are built on a foundation of real-world AI, securing a massive and sustainable energy supply isn’t a side quest. It is part of the main mission, especially in conjunction with grid-scale storage, such as Megapacks and Powerwalls. You can’t power a world of autonomous robots without a world of abundant, clean energy.
The Tesla Ecosystem
A US solar gigafactory would be the final, logical step in completing Tesla’s energy hardware ecosystem. While Tesla already manufactures some solar panels and the Tesla solar roof, the scale is too minuscule to matter.
By mass-producing its own panels, while also increasing Solar Roof production, Tesla would become a true one-stop shop for all things green energy. This would allow the company to supply its own large-scale projects, like the massive solar array for Project Oasis - the world’s largest Supercharger site.
It would also enable more complete residential packages, like the Giga-Small Haus concept home, combining Tesla-made panels and roofs with a Powerwall 3. This level of vertical integration would give Tesla complete control over the technology, cost, and supply of every major component in its energy ecosystem, from generation to storage to mobility.
Building a new Solar Gigafactory is about much more than just simply producing solar panels. It’s a requirement to power Tesla’s future products and make solar panels accessible to everyone.
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